Adam Smith in Beijing: Lineages of the Twenty-First Century (review)

Arrighi’s third major title, Adam Smith in Beijing is a refreshing sequel to the author’s two earlier works, The Long Twentieth Century (1994) and Chaos and Governance in the Modern World System (1999). In line with his systemic, historical approach to the development of modern world capitalism, this book explains the shift of the global political economy’s epicenter from North America to East Asia. Arrighi frames his argumentation and analysis in light of Smith’s The Wealth of Nations. The major argument–that the ongoing descent of the United States in the world economy and the ascent of China realizes Smith’s vision of a world-market society–is novel and provocative.

The volume is evenly divided into four parts, and each part contains three chapters. Part I lays out the theoretical underpinnings of the project, with a reinterpretation of Smith’s theory of markets and its implications for an economic development path divergent from the Euro-American model. Part II tracks the global turbulence in the first half of the 20^th century that, together with 9/11, set the stage for the Bush Administration’s Project for a New American Century. The analysis of the crisis of U.S. hegemony carries on from Part II to Part III. Part III focuses on the failure of the New American Century Project, and the shift in U.S. domination from a legitimate protector to a racket protector. Arrighi argues that the failure of the U.S. project and the decline of its hegemonic position consolidated China’s emergence as the power center. Part IV describes the unique features of the East Asian economic model, and how China’s development path is likely a realization of Smith’s ideal type of “natural course” economic development.

Along with Arrighi’s former works, this book is full of historical details to support his claims and arguments. The volume makes an impressive contribution, and has many strengths, particularly these two. First, the re-interpretation of Smith’s conception and theory of economic development directly confronts neo-liberal economists’ appropriation of Smith’s theory for their agendas. In contrast to the conventional belief that Adam Smith, as the grandfather of classical economics, advocated minimal government intervention to let the “invisible hand” do its job, Arrighi contends that Smith actually prescribed a strong and active role for the state in the economy. As the ultimate goal of market efficiency is to serve the good of society, the state must actively intervene to correct any socially or politically undesirable outcomes from market operations. Thus, the “liberal creed” advocated by the Washington Consensus was completely alien to Smith. Second, the argument that the Chinese economy’s path, prior to the European Industrial Revolution and in the twilight of U.S. domination, is closest to Smith’s “natural” path to opulence, radically challenges the advocacy of a “China (militaristic) threat.” Arguing that Chinese domination of the world economy (from the Song dynasty in the 12^th century to the mid-Qing dynasty in the 18^th century) was always based on national economy-making rather than war-making, Arrighi characterizes the East Asian market economy as non-militaristic in nature in contrast to modern Western capitalism, which is closely aligned with militarism. He argues that the divergent mode of economic development to be led by China in the 21^st century is built in this historical mold. Furthermore, China’s unyielding refusal of shock therapy and the strong role of its state in the making of a market economy from Deng Xiaoping’s to Hu Jintao’s regime has, in the author’s view, signaled that China is not following the neoliberal path.

It is difficult to do justice to a book of more than 400 pages in a few hundred words. The most exciting and refreshing work, to me, is found in chapters 2, 3, 6, 7, 11 and 12. These few chapters piece...